Education

NCSU, ECU using furloughs, pay cuts to offset lost revenue during pandemic

Posted September 24, 2020 12:01 p.m. EDT
Updated September 25, 2020 3:57 p.m. EDT

— North Carolina State University has started furloughing some employees and reducing the pay and hours of others to cut costs during the continuing coronavirus pandemic, Chancellor Randy Woodson said Thursday.

Woodson last month ordered that all classes shift online and thousands of students leave N.C. State's campus following a spike in virus infections among students.

"When we first got here, there were so many people. I was meeting new people every day. Now, they're kind of like all gone," student Kai Paxton said Thursday.

But, as Woodson noted, fewer students on campus means less revenue from residence halls and dining halls.

So far in the fall semester, the school has lost $75.4 million in its "auxiliary services" units, which include University Housing, N.C. State Dining, Transportation and the McKimmon Center. The shortfall is about 61 percent of their combined budgets, and the university is prohibited from using tax dollars or tuition payments to supplement the revenue each of the units generates on its own.

"Auxiliary units have worked diligently to consolidate services, reduce hours, close facilities, enact hiring, travel and spending freezes, renegotiate service contracts and, where possible, transition from in-person services to alternative online services," Woodson wrote in a letter to faculty and staff. "Unfortunately, due to the sharp decrease in revenue, some of our auxiliary units, in addition to operational reductions, must move forward to implement personnel actions."

About 225 employees will be furloughed, but most will be partial furloughs where hours will be cut, said Charlie Maimone, vice chancellor of finance and administration.

"It's probably the worst kind of decision that we need to make," Maimone said. "These are valued employees that contribute significantly to the campus in many ways. These services are essential when we're activated and working. These individuals help us to actually make things happen on this campus, so it's very disappointing that we have to take this step."

N.C. State's human resources department has set up a call center and a website to help affected employees and will also provide virtual consultations and information sessions, he said.

"We are confident that the actions we take within our auxiliary units, combined with the resources we have, will sustain the university’s operations for the remainder of fiscal 2021 – assuming no change in state-appropriated support or expected funding from tuition and fees," he said.

On Wednesday, Woodson disclosed that N.C. State plans to resume some in-person classes in January and leave dormitories open for the rest of the school year so students who don't have anywhere else to stay can live in single-occupancy rooms.

"The spring semester is an opportunity for us to bring employees back, if we can," Maimone said.

Although the furloughs don't affect faculty, professors are carefully watching how the pandemic economy is squeezing the university.

"It's terribly unfortunate, and I think a lot of the faculty's fear – our bigger fear – is that this is going to be driving decisions moving forward on how we bring students back to campus," said Paul Umbach, a professor of higher education in N.C. State's College of Education and president of the school's chapter of the American Association of University Professors.

Faculty expressed concerns of the potential that in-person classes might not last long during the fall semester and the need to plan for that, Umbach said.

"We're seeing what we think might be a repeat of this in the spring," he said. "We don't want our friends and colleagues not to have jobs, but does that override the health concerns of actually bringing students back to campus?"

Students are also paying close attention.

"I understand the school needs to reserve money because, if no one is here and no one is using the services, it's hard to keep them up," Paxton said.

"I'm kind of getting tired of this corona. I hope a cure comes out for this because I want to see people back on campus," student Anthony Noto said.

ECU furloughs

East Carolina University announced a similar move on Friday, furloughing 25 employees in its Administration & Finance and Academic Affairs departments. Some will be on furlough for a set number of days, while others will be out through the end of the fiscal year next June, officials said.

“This is a hard decision," Interim Chancellor Ron Mitchelson said in a statement. "No one likes this outcome. We’ve tried to reassign employees in affected units to vacancies in other university divisions when possible. Unfortunately, there may be additional furloughs announced in the coming weeks."

ECU has lost more than $25 million in revenue so far and is now issuing prorated refunds for housing, dining and parking, Mithcelson said.

"Across campus, the reduced demand for employee services and such a large disruption to revenues has forced an institutional response," he said.

Furloughs may include salary reductions or leave without pay. Employees are still eligible to participate in the State Health Plan, and they continue to accrue leave.

ECU human resources staffers are working with affected employees and providing them with information and guidelines, officials said..

The University of North Carolina at Chapel Hill also has furloughed some employees and is looking at pay cuts and possible early retirements to offset a $300 million loss forecast for the 2020-21 school year.